we are live in bloomberg world headquarters in new york. the top stories we're covering around the world and on the bloomberg. politics, the probe into potential collusion between donald trump's campaign and russia. our exclusive reporting details how a special counsel and the fbi are looking at everything from real estate to bank transactions. another obstacle to the president's agenda. the cbo projects the senate republican bill to repeal and replace obamacare would increase the number of uninsured americans by 22 million in a decade. and european central bank president mario draghi calling for patientce as he central bank holds on unwinding back stimulus. bill gross is sounding the alarm on the go slow policy of central banks. he will be joining us next. julia? julia: let's begin with that big

bloomberg skip today. robert mueller, the u.s. special counsel, is said to be expanding his investigation to look into president donald trump's financial dealings. his new approach to the probe could trigger a response from the president, who told the new york times that any digging into matters beyond russia would be out of bounds. however, we have been hearing from lawmakers on capitol hill today. just listen into what democratic senator amy klobuchar said earlier. >> mueller has the right to investigate this. he was given that authority by the justice department, and he reports to the justice department, and not to the president of the united states. julia: joining us now, one of the reporters who broke this story. great to have you on the show. you called it a follow the money investigation. to what extent really is this now about russia, and to what extent is this about other dealings that donald trump has had? >> the whole thing is about

russia. this portion of it, though, deals more with trump's business dealings and capital he got from russia for various real estate developments over the years, as well as some other projects, like the miss universe pageant that was held in moscow in 2013, and even the personal sale of one of his homes, in florida. scarlet: who is investigating here? we know robert mueller is the special counsel, and he is operating outside the purview of the fbi, but in the story you talk about how fbi investigators and others are looking at russian purchases of apartments in trump buildings. >> mueller was appointed by the then acting attorney general rod rosenstein to conduct this investigation independently, and he hired a team of prosecutors from around the country washington. scarlet: they are not linked to the fbi? >> fbi agents are also involved in the investigation, working for the special team that mueller has assembled.

and part of the investigation that mueller is taking on also originated with the southern district in new york's federal prosecutors office, and fbi agents that had already been looking into trump's former campaign chairman, paul manafort. julia: does russia have to feature in anything that they investigate here? or does this leave them down a path where those other irregularities, for example, or transactions that looks suspicious on price basis, or whatever it is, will they continue to investigate? i guess what i'm asking is, the point donald trump made to the new york times last night -- if it is not russia related, it is out of bounds. is anything truly out of bounds for the fbi? christian: the mandate for mueller when he was appointed special counsel was to investigate the russian interference in the 2016 presidential election. but if you look at the rosenstein letter appointing , there are, you would call them

catch all provisions toward the end of it that say, essentially, investigate anything that has merit and is related. so you could interpret that letter as giving mueller a pretty broad mandate to follow the investigation where it goes. trump's comments seem to suggest he thinks that there should be very narrowly defined interpretation of, you know, what russia's involvement in the election was. scarlet: how are the fbi investigators or the special counsel's office responding to the president's, you could say warning that this investigation should not go past the campaign involvement or ties to russia? christian: they have not commented on that yet. and they did not comment to us for our story, and there has been no response from them since. scarlet: all right. certainly something that broadens further. think of bill clinton and how white water turned into

something else very quickly. julia: we kept it toward trump, but it is much broader than that, surrounding jared kushner as well. we will wait to see on this one. great work on this. we will continue to talk about this, no doubt. scarlet: meanwhile new revelations are casting doubt on president trump's agenda. earlier today the congressional budget office came out with a new us met that could -- estimate that could present a new obstacle for mitch mcconnell. kevine latest, kevi whitelaw joins us from washington. so many cbo scores, i can't keep track of them anymore. which one is this? what does it cover? what does it not cover? kevin: this is for the revised repeal and replace bill that mitch mcconnell release. and it doesn't at this point have the votes. but what -- there is a renewed, revived, slightly back from the debt negotiation going on right now, with the white house involved, republicans involved,

trying to figure out if there is some way to add perhaps a little more money into the bill to try to win over some of the moderates who are worried about curbs. the medicaid cost mcconnell needed this analysis so that he knows how much money he has to play with before he starts offering extra funding for coverage. here, the cbo score is incomplete, it does not include cruz amendment, something conservatives have been wanted aiming to allow cheaper insurance plans. the new cbo score has another thing in it which is quite interesting, suggesting that deductibles in some of the various plans that would be out there would go sky high within a decade under the way the bill is written. some people could be paying just crazy amounts of money. half or even more than their income in deductibles. julia: the bill the cbo analyzed

did include an extra $17 billion for the cruz amendment. itn though it included that, did not have the amendment within the analysis it did. i am confused that they did not look at it themselves. if they do want to vote in some way, as the senate majority leader has talked about next week, how do they go about this? where else can they assess this? i have heard the department of health and human services analysis is out there. can they use that? kevin: the administration has the analysis hhs went out of how the cruz amendment would work. cbo said it will take a few more weeks for them to figure this one out, so they could use this. it is sort of at the discretion of the senate budget chairman as to how they do that, but that would really violate all kinds of congressional tradition and would really obviously anger the

democrats. it also might not satisfy republicans. the cbo, at one point or another, will come out with something, and it is almost certainly going to contradict this hhs analysis, probably very dramatically, because some of the assumptions in the hhs analysis don't really stack up. you are looking at a situation where they kicked it out of the latest analysis, just because they are not ready to score it, but mitch mcconnell once a number. it has left republicans saying, what are we voting on, the repeal only bill, which is what we thought we would do? our we voting on a bill -- are we voting on a bill we don't really understand the consequences of, some additional changes to it? is a lot of uncertainty. some people like susan collins of maine, a moderate, are starting to get a little fed up with all the back-and-forth, saying we should start over. other senators say, this is going in the right direction, we are making progress, trying to deliver on our promises. they are under a lot of pressure

to try to deliver on seven years of promises to repeal obamacare that they have made. it is not really clear that anything that is happening right now is changing the fundamental dynamics and bringing on the handful of conservatives and moderate all that's. julia: i think that the tone says it all. great to get your insight, kevin whitelaw of bloomberg news. u.s. stocks initially fell on news of the probe into trump's businesses. we saw a slight selloff. >> we also saw a take off in volume. now things are pretty much flatlining. averages.major if the s&p and nasdaq are able to eke out a gain it would be a record close for the averages. the nasdaq continues to outperform by a slim margin. take a look at the year-to-date performance of the nasdaq versus the dow in white and the s&p 500

in blue. this is not year-to-date, going all the way back to 2005. so year-to-date it has accelerated after hitting a speed bump after the election. in terms of movers we are watching today, some on analyst recommendations. royal caribbean upgraded to overweight from neutral at jpmorgan. the analyst looking at his recent channel check, saying they continued good operating momentum. johnson and johnson upgraded at credit suisse following company earnings, a reinstatement of coverage with an overweight rating. there is looking for opportunities in growth in some of its drugs. nike upgraded to overweight at morgan stanley. the analyst says earnings per share and sales in north america, the growth rates are bottoming out. also the air vapor max, one of their new shoes, could become the next $1 billion shoe for

nike. scarlet: julie hyman, think you so much. let's get to bloomberg first word news. has told asimpson nevada parole board that he wasn't aware when he and others went to two hotel rooms to talk to sports memorabilia dealers that one of them had a gun. simpson has spent nearly nine years behind bars for armed robbery and assault with a weapon for the robbery, and in asking for parole, simpson told the panel, i have done my time. just session has no -- jeff sessions has no plans to resign as attorney general despite president trump expressing regret about appointing him as the top law enforcement officer. sessions spoke today in a news conference to announce a international cybercrime enforcement action at the department of justice. >> i have the honor of serving as attorney general.

it is something that goes beyond any thought i would ever have had for myself. we love this job, we love this department, and i plan to continue to do so as long as that is appropriate. mark: president trump told the new york times, sessions's recusal from the russia investigation was "extremely unfair." sessions, a former alabama senator, was the first to officially endorse the trump candidacy. the kremlin says president trump did not tell vladimir putin the u.s. was ending aid to syrian rebels. a russian spokesman confirmed the two leaders had a second conversation after their first formal encounter at the g20 last week. but he said that there was no secret meeting. french president emmanuel macron has announced an increase in the budget of the armed forces for 2018, part of an effort to limit criticism over his decision to cut funding this year. france's military chief stepped

down wednesday because of those cuts. --ay president macron the ministry will receive an extra $2 billion. no other budget except the army gets an increase in 2018. global news 24 hours a day powered by 2700 journalists and analysts in over 120 countries. this is bloomberg. scarlet: thanks so much. coming up, the one and only bill gross warns central bankers to proceed on tightening with caution. has he changed his tune? from new york, this is bloomberg. ♪

julia: this is bloomberg markets. i am julia chatterley with scarlet fu. scarlet: bond guru bill gross is

throwing a bit of a curveball. he previously argued for the federal reserve to hike rates, but today gave a go slow warning for janet yellen and other policymakers. in his outlook today, gros wrote "central bankers and investors should view additional tightening and normalizing of short-term rates with caution." bill gross, fund manager at janice henderson -- janus henderson, joins us from newport beach. you have been vocal in urging the federal reserve to raise rates because a low rate environment hurts individual savers and banks and insurers, and distorts asset prices and markets. sounds like you are now adjusting your view. what specifically prompted the adjustment? i don't think i really adjusted things, scarlet. i think interest rates should be raised to a more normal level in order to favor business models that are currently being hurt,

such as insurance companies and pension funds and so on. i simply warned, based on the historical knowledge of a yield curve flattening, between three-month treasuries and 10 year treasuries, we may not have to flatten as much as historically in order to produce a growth slowdown or recession. i actually think, scarlet, a growth slowdown or recession would do the economy some good. wood. forest with dead you clear out some of the deadwood and prevent forest fires. so a slowdown is fine with me, because it produces in the long-term a healthier economy, a s was proved five or 10 years ago. scarlet: a slowdown would be good for stability. howain a little more on

slowing the yield curve to stop the onset of recession is flawed thinking? bill: going back 25 years, there have been three recessions. i used the one starting in 1990, and in the 2000-2001 recession, and of course the great recession in 2008 and nine. all were preceded by flattened yield curves, meaning the yield on a three-month treasury bill was the same or even hire than a -- higher then a 10 year treasury note. currently the spread between those two is 85 basis points, with the 10 year being higher than a three-month treasury. private economists, fed officials, may be assume we need a flat yield curve to produce a recession. i would say commonsensically, based on higher leverage in the private economy, and based upon what i call proportionality in terms of an interest rate increase, that we don't need a

flat yield curve to produce a recession, and perhaps we have come a long way already in order to induce a growth slowdown. scarlet: the historical models may not be the best president for what we are experiencing now. obviously every economic reversal, every economic slowdown, every financial crisis, is different than the last, why are borrowers with short-term debt at the front edge of risks to the economy right now? bill: well, they always have been, going back to the subprimes, when the subprime rates were increased on junk mortgages and junk houses so to speak in terms of overpricing. basically that was it, in terms of the ability of an economy to withstand higher short-term rates. it is always the higher short-term rate and the flattening of the yield curve that produces a slowdown. borrowers, which are sensitive to short-term rates, which are dependent upon libor plus types

of interest rates, are the first ones to feel it. those with longer-term rates, 30 year mortgages, don't feel it basically because the rate stays almost the same. the short-term rate, as it rises,, basically threatens an economy. historically as i have mentioned, flattening the three-month treasury bill to the 10 year treasury, you know, has induced a recession. i don't think we need to go to flat in order to produce a growth recession, simply because we are a more highly levered economy, not only domestically but globally. scarlet: so what would you advise the fed to do? how would you urge it to perhaps fine-tune its approach? bill: well, i think they should, you know, begin the tapering of their treasury portfolio. that would produce a more steep yield curve, in my opinion, by not buying more 10-year treasuries, by not buying more five-year treasuries, as the

current portfolio matures, and then ultimately, you would think treasuries in the longer term would move higher by 10, 20, 30 basis points, and produce a more steep curve that would allow for higher profitability in terms of banks and would not threaten those with short-term interest rates in terms of their interest rate cover. so i think the fed is beginning to move in that direction. they are beginning to think that perhaps raising interest rates, from this point forward, should be done differently, and that a tapering of the portfolio, of the current portfolio, would be the more logical step. scarlet: done differently is the key word here. as the fed talks about this, without giving an exact timeline, and as it continues with its rate hike path, financial conditions are still fairly easy, even as the fed titans policy or talks it up. what does that reflect?

what does that say about the state of the economy and the level of influence the fed has over the economy? bill: well, i think the fed has a significant influence on the economy, as do other central banks. we are in a finance-based economy, as opposed to 30, 40 years ago when it was more real economy oriented as opposed to paper oriented. so to the extent that, you know, financial conditions are easy, and i think they are, i think for instance high-yield spreads are very tight, i think interest rates are very low. to the extent that financial conditions are easy, it leads ultimately, stability leads to instability. when does that occur? when does the music stop? it's hard to tell, but ultimately, i think a more balanced interest-rate environment, if only through reducing the fed's portfolio, would be more appropriate measure. scarlet: giving your concerns,

how are you investing right now? bill: i think high-yield spreads are very tight. scarlet, because the fed has been so easy, it has not allowed for creative destruction to take its place. we are keeping a lot of zombie corporations, i will not name any specifically, but many highly levered corporations, some in the oil patch, have been allowed to continue on, if only because interest rates have been low. typically, a recession or a tightening of central banks has , andoyed creatively allowed new growth to take place. stability has led not to instability to a very specific point, but it is beginning to move in that direction. who've the fed --

behoove the fed to continue to tighten and produce a growth slowdown, or maybe a recession in future months and years. scarlet: let me get your take on what happened with the ecb this morning. mario draghi talked about being persistent and patient and prudent in putting off discussion about winding back stimulus. he didn't say anything about the euro today, and it was not something he would bring up on his own with the euro at high levels from the above 1.16. at one point -- what point would draghi lean against currency strength? bill: that came up in the question and answer session. there was a specific question on the currency, and he deferred basically and didn't mention much, preferred to financial conditions as opposed to the specific point in the euro, so your question is a good one. it was not answered by draghi this morning, but i would think at some point, if the euro continues to strengthen, you have basically a low inflationary type of evolution,

where a stronger currency leads to lower inflation, everything else being equal. at some point, i don't know whether it is 1.17, 1.20, same problem the boj has had, at some point central banks start to think about their own currencies although they will not publicly admit it. a strong euro is evidently not in the favor of draghi moving in a more dovish fashion. scarlet: bill gross, fund manager at janus henderson, thank you so much for joining us today. julia: a look at some of the biggest business stories in the news right now. exxon mobil has been fined $2 million for filing russia sanction roles in 2014. according to the treasury's office of foreign asset controls, the oil giant failed to disclose dealings with individuals on the block list. exxon mobil in a statement said

it is following guidance from the treasury. abercrombie & fitch is looking to alibaba to help make a comeback. the retailer will sell its kids line on alibaba starting july 26th. earlier this month abercrombie abandoned acquisition talks in favor of executing its own turnaround plan. that is your business flash update. still ahead, the finish line in the race to acquire scripps could be close. discovery and viacom are vying to buy the media company. we will be discussing next from new york. this is bloomberg. ♪

julia: from bloomberg world headquarters in midtown manhattan, this is bloomberg markets. i am julia chatterley. commodity markets are closing in new york. let's get you a look at the day's movers.

gold is moving higher today. ing losses after bloomberg reported special counsel robert mueller is expanding his investigation into president trump's business activities. that news also put pressure on the u.s. dollar in the session today. now to the agricultural futures. , corn, soybeans, rice, rising today. scorching heat and drought conditions in the great plains are adding to supply uncertainty, a story we have been talking about now for many weeks. #btv in the ag space, g 5963. in the last month pork prices have reversed big-time. american appetite has pushed pork belly prices to record highs. in energy, crude oil is dipping today as inventories decline, but overall production was up.

is still short of record levels hit back in may, despite the fact we are in the thick of summer driving season. scarlet? scarlet: you have adjusted well to the united states. big-time barbecue and summer driving. [laughter] let's move on to some other corporate news. talks between scripps networks and potential suitors are heating up. according to people familiar with the matter, a deal could be announced by the end of the month. we reported both discovery communications and viacom have been holding separate talks with the tennessee-based owner of hdtv and food network. joining us from princeton, bloomberg deals reporter alex sherman. we say that the talks are heating up and in advance stages, give us more of a sense of what remains to be negotiated? alex: i think there are still a few sticking points. but the news we just reported an hour ago, that final bids might be coming sooner rather than later, could be eye-opening to

some analysts that have published notes over the past week four hours or so saying they were a little skeptical of a deal. one of the reasons still exists. one of the main factors, who will control this combined company? whether it is discovery or viacom that ends up being the buyer, the control of a combined company is tricky because all three companies are owned by families or at least controlled to some degree. scripps network controlled by the scripps family. discovery, controlled not by a family but by john malone, who controls a lot of these entities, and of course discovery controlled by malone, and viacom controlled by the redstone family. if a deal is done with a cash and stock component, as my sources tell me, both sides will have to figure out exactly who controls the votes here. maybe they will be some. class a shares and class b shares, how all three of these structures are -- comedies are

structured today. those can pose major competitions to a deal getting done, and i'm sure that's what the advisors of these companies are working on right now. julia: we have seen a similar deal done, the same kind of ownership issues with starz and lions gate entertainment. they had similarly funky structures within them. is that a precedent for how you can get around the ownership structure, a workaround here? alex: absolutely. in fact, one of those companies, starz, controlled by john malone, so the same player here. in the other case, the other shareholder for alliancegate lionsgate needed to cede some voting control but became the largest holder of a shares in the combined a structure. that is probably a template looked at by all three companies right now, as they decide how to do a deal. but it is more than just the voting control issue.

the price of course is a major issue. scripps and discovery have had talks at least twice before in previous years and did not get to a deal, in large part because the price wasn't there. now you figure, if viacom is really putting forth a major threat here, another offer to discovery, if there is some sort of bidding war situation here, john malone is not known to emerge victorious in bidding war situations. he likes to get assets on the cheap. so that may be another hurdle here if there is a major threat with viacom. it's possible discovery, even if discovery makes the most sense as the buyer for scripps, could back down. julia: not looking to overpay for this. great to get your insight, alex sherman in princeton. elon musk sends the technology and transportation world into a tizzy, he tweeted he received verbal government approval for the boeing company to produce a underground new york city to

baltimore d.c. hyperloop, meaning you could get from new york city to washington dc in 29 minutes. he later said the record straight, saying there is a lot to be done to receive formal approval, but he is optimistic that will happen. >> thanks for having me. julia: i think these tweets say it all. a little bit of enthusiasm. >> this is the elon musk playbook. make a big, grandiose goal, and then start trying to bring people along, getting investors and the government on board. the white house did not totally bat this down. they said they have had discussions with elon musk over infrastructure projects, and they are optimistic some infrastructure projects can come from the private sector. i would not book your ticket yet, but you know, you never know. scarlet: the white house did not say no, so it is go ahead.

how realistic is this, 29 minutes between new york and d.c.? >> it sounds amazing. i think there's a lot that has to be figured out. the thing elon musk is talking about here, which is the taking part, is probably the last significant part of the problem. we know how to dig tunnels. this would be i think the longest tunnel ever dug, so there is that, but the biggest issue is the superfast train that would have to go hundreds of miles an hour faster than the fastest train that exists. elon musk unveiled this crazy sort of prototype design involving sleds with cars on them, but it is super futuristic and really just in the earliest prototype stage. julia: so exciting. i understand his enthusiasm. but then i think of the conversations we have had about infrastructure spending, and all the criticisms of the united states, the amount of time it takes to come up with these projects. the different state, local, federal approvals you have to get, and i just wonder, just in

terms of the extensive level of approvals needed to even get this, i mean, this is a long game. >> it is. the interesting thing is, i wrote about this effort in february, and actually went looking at a tunnel boring machine with elon musk. call toat experience i experts in infrastructure and expected them to beat this sound totally and say this is the worst idea ever, he is a neophyte, he will never do it, and they were surprisingly open to the idea. one of the big reasons infrastructure projects go slowly, it is not a technological thing, it is a red tape thing and there is an attitude in some circles that somebody as crazy as elon musk might be able to move things along. now i think the idea of 29 minutes, the grandiose vision, maybe we will not get there, but he is a smart guy. scarlet: maybe there is something for the trump administration to embrace in this. could be a win-win for everyone. thank you so much.

let's get you a check on the headlines of first word news with mark crumpton. with o.j. simpson pleaded the nevada parole board today to set him free after more than eight years in prison for a las vegas hotel room robbery, insisting as he has all along that he was only trying to retrieve mementos stolen from him and never meant to hurt anyone. you're looking at live pictures of, actually, we are not right now, we will get back to that. simpson is at the lovelock correctional facility in nevada. the 70-year-old former football star said he never pulled a gun on anyone or made any threats. he insisted nearly all the memorabilia he saw in two dealers' hotel rooms belonged to him. he told the parole board, i take full responsibility for the robbery. i have done my time, as well and respectfully as i think anybody can. the parole board is now deliberating whether to grant simpson's release.

the special counsel investigating ties between russia and the trump campaign is expanding the probe, according to a person familiar with the matter. robert mueller is examining a broad range of president trump's businesses as well as those of his associates. among other things, investigators are looking at russian purchases of apartments in trump buildings. members of the venezuelan opposition blocking streets of the capital caracas today as a national strike got underway, the first strike since a 2002 topplee that failed to nicholas maduro's predecessor vez.go shabbos -- hugo cha it is meant as a national disapproval of president maduro's attempt to rewrite the constitution to grab more power. london police are trying to identify victims at the fire of building arel

getting help from the first responders after the 9/11 attacks. the after bolton police said policee -- metropolitan said that the extort nares size of the scene made it necessary to call on experts who worked after the collapse of the world trade center. at least 84 people died in the blaze in west london. overl news 24 hours a day, 120 countries -- i am mark crumpton. this is bloomberg. back to you. julia: thanks, mark. coming up, goldman sachs ending an era. next.t says about what's from new york, this is bloomberg. ♪

julia: this is bloomberg markets. i am julia chatterley.

scarlet: i am scarlet fu. let's head to julie hyman. julia: taking a look at retail today. the retail etf that we track -- it is up about 0.6% today, helped in part by stronger than estimated earnings report from companies like monroe muffler. we are watching shares of sears, trading higher in a decided fashion, up 12%. sears has been battered of late, over the last several years, so it is something of a rebound from that. also on the news that sears will be selling its kenmore appliances on amazon.com. sears used to be the largest seller of appliances. they gave up that title to some rivals like lowe's and home depot, so they are falling on this news. whirlpool is also falling. it makes computing appliances. we don't have market share data specifically on what the control of the appliance market looks like, but one interesting window into it. if you can run splc on your

bloomberg, you get this data in terms of what percentage of whirlpool sales come from the various retailers. lowe's is the number one client of whirlpool with 6% of sales, and then home depot, sears, best buy, and amazon. this gives you an idea of what selling kenmore could mean for some of the other retailers. sears selling appliances on amazon. finally, one more laggard i want to mention in selling kenmore cn for some of the other the xrt, y called marine max that sells boats. shares are really punching today after that company's earnings miss estimates. they cut their forecast, comparable sales last quarter down 10%. apparently not as many people buying their votes. -- boats. julia: thanks, julie. the times are changing at goldman sachs.

shares owned by partners has dropped to less than 5%, compared to 60% after the ipo in 1999. joining us -- how excited should we beginning about these percentage changes? you get natural attrition, people leave, people grow up and buy houses, pay school fees. >> for work for the government like gary cohn. julia: but? >> if you are the goldman sachs beat reporter>>, you are very excited about these. [laughter] i think it is an indication of how goldman has changed in the last 18 years. i mean, less than 5%. that means 95% of the company is owned by other people. it was a partnership. it is not a partnership anymore. it is a significant milestone. goldman still has the partners, still the most senior rank at the firm, they are still 460,

480 partners at the firm, and that is what everyone is still striving to become. but the fact that they are owning less and less of the company is certainly notable. julia: the regulators would look at this. remember during the financial crisis, they wanted to see people paid in shares more, they wanted to see ownership structure from those actually employed by the business so they have some skin in the game if things go well and if things go badly. do you think in terms of the sentiment shift we can read anything in light of some of the comments that have been made like this, about the relationship structure goldman sachs has with clients here? is there any sort of read through to a lessening of commitment, i guess, in the business? potentialt is a difference between a partnership and a corporation. i think if you asked any partner at goldman, they would tell you they are completely committed to the firm, and committed to

making money for the firm. but that certainly is something you can bring up. it is a good point. joshet: something that wrote about in his book about steve bannon, who was a partner at goldman at some point. dakin: i don't think he was a partner actually. scarlet: he was pretty high up, and he talked about how when goldman sachs was a partnership it was invested in banking, but as it lost the partnership status and became a publicly traded company and took on more of the attributes of a listed company, then there was more concerned about trading gains and less about helping companies grow. that was his take at least as described in the book. dakin: it is a good thing to remember that going public gave goldman a big chunk of capital, right? you have to do something with that. you don't need it in investment banking. you do need it in trading. going public gave them that sort of competitive advantage, so it sort of made sense once you had a big pile of captive money, to

go use that in the trading business. scarlet: do something with it. thank you so much. the beat reporter for goldman sachs, very excited about the change in partnership. we artime for the bloomberg business flash. united auto workers is accusing nissan of intimidating workers at its this is that the plant. the uaw says the automaker is threatening to shut down the factory if workers vote in favor of joining the union. the vote is scheduled for the first week of august. nissan says the allegations are totally false. italy's billionaire benetton family is on a list of investors interested in buying ducati from volkswagen. they say the german car manufacturer wants as much as $1.75 billion for the italian high-end motorcycle firm. ought ducati for 990 million in 2012. that is your business flash update. its -- deloitte ending

women advocacy group among others. why are female employees cheering this on? we have details from new york. this is bloomberg. ♪

julia: this is bloomberg markets. scarlet: as diversity progress stalls in corporate america, deloitte is taking a step away from traditional affinity groups for women and minorities. over the next year and a half it will face out workplace group supporting gay and minority employees. we explore why employees advocating for diversity are cheering this news in walk the talk, a bloomberg series talking about social changes that have outpaced -- we talk about these social changes that have outpaced america's ability to adapt, or

at least corporate america's ability to adapt. sounds like deloitte is ahead of a lot of other companies that have not really embraced or have done a lot with regards to employee resource groups. >> only 15% of companies even haven't really resource groups -- have employee resource groups. deloitte has artie moved into those, and now they say they are something that comes after. they will still focus on women and minorities and these issues, but it became clear to them they were not people at the table who , white menaction often were not engaged because they saw these as groups that did not include them. scarlet: the firm is phasing out these groups, but they will not drop the topic entirely. how will they make sure it is not ignored? jeff: they will create what they call inclusion councils, where they bring all these people together who used to be in different groups and happen have conversations based on each location. if a certain topic has a bigger issue at one place, it might

look different than the group in new york, chicago, l.a. it depends on what the issues are. they will configure it to be more reactive to what the employee needs are and the business cases. they are trying to see, how do you take what these interests are and make a business purpose of them, rather than having them be an echo chamber. scarlet:scarlet: what was the catalyst for deloitte to shift away from these affinity groups? >jeff: millennials. 57% of employees at deloitte are millennial's. i was all for women's i went into an all girls school, but when going into the workplace said this is artificial and i don't really like to be boxed into one group. i don't see it as productive. i went into an all girls school,they would like to see ao bring all the viewpoints together. scarlet: given all of that, is any company following deloitte's . lead. we talk about how it is out front in terms of moving away from employee resource groups,

when other companies don't even have them. are other companies saying, let's move in that direction? jeff: my sense is this is something somewhat unique, and even within the company there are people saying, wait a second, these were very important groups. some of the people facilitating these moves actually were key members of the groups. so they are really stressing to their existing employees who have been there for a while, this doesn't mean we will not focus on these topics, just we will get rid of the brands you are used to and do it in a different way. scarlet: got. -- got it. there is a sense diversity progress is stalling across corporate america. what does your reporting indicate to you? have you seen evidence of that? jeff: definitely. you look at the statistics, a lot of statistics are almost like a fat line the last decade. scarlet: we have to jump in for a second. we now have the parole results, a parole hearing for o.j. simpson. you are looking at a live shot of a courtroom in lovelock, nevada, where o.j. simpson was

in april hearing. we are waiting -- in a parole hearing. we are waiting to hear what the result is. he was granted parole. thank you, chelsea, for giving us those details. o.j. simpson granted parole. 2008difficulty with the conviction of an armed robbery involving sports memorabilia dealers in a las vegas hotel room. julia: even though he has been given the approval for the parole, it will take at least until october for him to be released. so far the nevada hearing result today, o.j. simpson being approved for parole. he has been in prison since 2008, as scarlet mentioned, for armed robbery. scarlet: not for the other incident, but armed robbery. separate completely. julia: now he has been granted parole. we will continue to bring you news on that as we get it. scarlet: you are now fully ingrained in americana. summer driving season, barbecue, o.j. simpson. julia: here we are. scarlet: much more coming up.

[laughter] julia: coming up, reporting on how special counsel robert mueller is expanding his probe into the campaign of u.s. president donald trump and possible ties to russia, looking at transactions from real estate, banking, a number of elements here being investigated, not just donald trump of course, also a focus on the likes of jared kushner we believe, other associates surrounding this administration. the details of this investigation, increasingly consecrated. all the details next. scarlet: even as donald trump yesterday said that was not something that was appropriate. he had put a bright line under that. this is bloomberg. ♪

york, 3:00 p.m. in new 12:00 p.m. in san francisco, it :00 p.m. in london. i'm julia chatterley. scarlet: i am scarlet fu. welcome to "bloomberg markets."

♪ julie: we are live in bloomberg world headquarters in new york over the next hour. here are the top stories we are covering on the bloomberg and around the world. in politics, the program into russia's involvement in the election of 2016 expanding to president donald trump's businesses. details on how special counsel robert mueller is looking at the president's real estate and bank transactions. u.s. stocks recovering after falling on the news of the expanded russia probe. investors are shaking off the drama in washington. a murky end to the second round of brexit talks. the european union refuting compromise while the secretary david davis is calling for more flexibility on both sides. we are one hour from the close of trading could get a check on the markets with julie hyman. julie: i should mention, stocks

are picking up political affects and the dollar has been persistently low throughout the day. the dollar is the asset reacting was to do violence out of washington. stocks, not of -- not a whisper of volatility in the trading ranges. there is quite a lot of action. it is earning season, after all. let's look at the winners in the s&p 500 as a result of earnings. kinder morgan getting more attention with its payout. the company says it plans to boost its dividend to investors by 60% next year. that is something that investors have been waiting for. bb&t becoming one of the regional banks to come out and beat estimates. the net interest margin .47%.ing to

on the downside, we have ads,nce data systems, forecasting earnings per share below estimates. we saw the paint and coatings maker shares down after the company so less house paint to consumers -- sold less house paint to consumers during the quarter. and ch robinson, the transportation company, growing faster than the prices it charges customers, and those shares down 5.5%. we have earnings to come after the close of trading today. we want to get a look at how those stocks are trading. ebay is a little bit higher. capital one financial is a little bit lower. as you talk about the depth of volatility with the indices, that is not true with individual stocks here.

we have seen it really come down. at the same time, individual stocks have relatively elevated volatility, particularly going into earnings. implied volatility is going into the earnings report. you're not finding it with the vix and s&p 500. speaking of individual companies, we have breaking news on exxon. exxon mobil will challenge the finding by the treasury department that it violated russia sanctions. trucks right -- treasury is finding exxon a $2 million for what he calls egregious violations of sanctions on russia, and that was one rex tillerson, the secretary of state, was running exxon mobil as chief executive. russia, robert mueller is said to be expanding his probe into possible ties between donald trump's campaign and russia.

ofh more on the transactions his businesses as well as his associates. greg farrell helped to break the story and he joins us now. congratulations on the scoop, greg. tell us more about which of trum p's businesses the special counsel is looking into. sense, it isbroad all russian purchases of property, known interactions between the russians and trump. we highlighted the highest profile ones can in addition to the high-rises in new york. thursday -- there is the soho development, the licensing fee he got from the pageant in moscow come with a friend of his brought over there. of then there's the sale palm beach, florida, luxury insion, oceanside mansion,

2008 more than twice than what trump paid for it years earlier. julia: do we have any sense of what precipitated the expansion of the probe, and who else is included in trump's known associates? greg: no, and be careful in terms of expansion. this is more of a signal that mueller's view is to take a broad look on anything involving russia going back with trump. on the chance that it might shed insight on events that occurred in the last two or three years. taking a broad view of what the , going back to the earliest once more than a decade ago. also want to make the point that we had a press briefing from the white house today. sarah huckabee sanders, the messages that trump doesn't intend to fire mueller but has the authority. this filters into the

discussions we have on this as we continue to track it. scarlet: president trump america"at a "made in event. we will bring you any headlines on matters of state. julia: let's get more perspective on the ongoing investigation. joining us on the phone from alexandria, virginia, is the former fbi director and currently president of the law enforcement legal defense fund. great to have you on the show. are you surprised in any way by being investigated as part of robert mueller's investigation, whether it is real estate, the bank transactions that we saw? is this part of what we would expect in terms of the probe into russian connections? >> well>>, yes and no. i would expect that mueller wants to understand who are the principles are the pubic --

predominant people in his prior russian business relationships who might have had contact with him or the campaign as it relates to the russian influence , part of the election thereigation, or whether might have been collusion with somebody on team trump as he was then candidate trump. i think probing the nature of those relationships and seeing if any of those familiar names might have popped up is probably a prudent thing to do. i would be a little bit surprised today if we find mueller's team digging into the actual substance of business transactions at this point. i certainly don't think his commission is to go back and look at a 10-year-old business transaction and find out if donald trump paid the right amount of taxes on it. and try to go on a fishing

expedition for other potential charges. i think that this point it may be trying to understand the relationships and see if any of the old relationships popped up in the relevant time period. ron, to go happens, precisely to your point of going outside the russian the fbi finds if something untoward in the business dealings they don't have anything to do with russia? you have to assume that given what happened with james comey, the fbi will be enthusiastic, shall we say, investigators here? do they put it aside or do they progress it even if it has nothing to do with russia? ronald: i think it would depend on the nature of the activity. that is something potentially criminal or related to the fbi jurisdiction, and potentially within the statute of limitations, because you

could be talking about something that is so dated that no prosecution will ever come on it . i think initially they would have to pass it through those wickets and make a determination as to whether he refers this to -- back to the fbi, to another investigative agency for something within their jurisdiction, or whether he has a discussion with attorney general, and his own scope is somehow expanded to encompass the prior activity. julia: makes sense. ron, great to get your insight. former fbi assistant director and currently president of the law enforcement legal defense fund. scarlet: let's get a check of the headlines with mark crumpton. mark: in a unanimous decision, the nevada parole board has rented o.j. simpson his release from prison effective in october. the 70-year-old simpson has spent more than eight years behind bars for armed robbery and assault with a weapon after trying to take back sports memorabilia in a hotel room in

las vegas in 2008. , spendingcome here nine years making no excuses about anything. i'm sorry things turned out the way they did. i had no intent to commit a crime. i came here -- i tell the inmates all the time, we are all convicts. i am a convict. board'se of the parole commissioners said letters opposing simpson's release requested the board take into account his 1995 acquittal on murder charges in the deaths of his wife nicole brown simpson and her friend ronald goldman, as well as the civil decision that found him liable for their debts.

the number of americans without health coverage would be increased by 22 million in the next 10 years according to the congressional budget office. the cbo finds that the bill crafted by numbers of the senate gop caucus would raise costs for people with private insurance coverage and reduce medicaid spending. the cbo says the bill cuts the deficit by $420 billion compared with the $321 billion in deficit reduction in an earlier version. dianne feinstein, the top democrat on the senate judiciary committee, says special counsel robert mueller has approved congressional testimony from president trump's former campaign chief paul manafort and others. today comes senator feinstein was asked if manafort and donald trump, jr., will accept of the committee request to appear. senator feinstein: am i concerned? no, i'm not concerned, because if they don't, they will be subpoenaed. mark: the judiciary panel is working with mr. mueller to make

sure there are not any conflicts between its investigation of russian meddling and the justice department's probe. both are investigating possible links to the trump campaign. european union and president donald trump is urging:'s president to meet him and discussed changes the party is making to the nation's judiciary. alish realm acres approved law that gives the president, not judges, the power to regulate the work of the supreme court and appoint its judges. critics say the bill kills judicial independence and puts judges under political control. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. scarlet: thanks so much, mark. happening right now, president trump joined by ceos of merck and pfizer. this is the corning ceo making remarks. this is a "made in america" event taking place.

julia: partly they are saying that glass packaging is not designed to handle current development and increasing the chance of contamination. and actually very important subject and a positive announcement on an otherwise tough day for donald trump. from new york, this is bloomberg. ♪

scarlet: let's turn to the latest on brexit. a second round of talks in brussels today. the closing press conference, saying he is still looking for clarity from the u.k. emma chandra spoke with the chairman of the global council and a former trade commissioner on how they can get through these negotiations. 2 talkingt to phase

about future trade agreements by getting through phase 1 first. phase 1 is settling the financial cap, how much money britain owes the european union and how much it wants to pay in the future to participate in further programs. and secondly, to clarify and establish the status of eu citizens, those on the continent and those in britain, after britain has left the european union. until and unless we get the agreements in phase 1, we won't be moving on to phase 2. the eu site has made that clear, and it is something that britain has to come to terms with. emma: do you see talks breaking down, and what would be the trigger? chance ofs a 50-50 phase one talks not reaching agreement. i would like to think that britain, which has traditionally ,een a country of common sense will show sufficient flexibility to get through phase one, because we have to get on to the

all-important second phase, which is about our future trade. the british government finds itself in a very difficult position for this reason -- very difficult for them to advance through the negotiation having put in place these different political red lines. and yet, they can't either reverse and find a different route through it, because the conservative party in effect has put our ratchet in place to stop their government moving back or accepting any flexibility or compromise in the future of these negotiations. so in a sense, they can neither move forward because of the red lines, nor can they move back and find another route, because of the refusal of the hard line in the conservative party to see an alternative way through. there is a sort of stasis in these negotiations, a lack of progress in what is a fixed, for both phases

of the negotiations to be completed. realistically, i don't think that is going to happen. emma: that is quite a pronouncement, that we will not even get to phase 2 and talk about trade. >> i think we might get you talking about it and scoping it out, but the idea that by the end of next year -- back end of next year, 2018, we will assign off on the terms of exit from the european union and put in replacementative trade arrangements that will government goods and services for the near future is completely unrealistic. i'm a former trade commissioner and my job for years was to negotiate on behalf of the european union with the countries. emma: let's turn to the u.k. and the prime minister, theresa may. she has convened the first meeting with business leaders today, the first becoming prime minister, and they are expressing concern about what is happening with brexit. is this late in the game?

do you think business leaders will hear what they want to hear from mrs. may? >> i'm glad she has taken the step, because business leaders have a great deal to tell her about how the british a company -- british economy will function and flourish in the future, and the sorts of trade arrangements we need going forward. what is our biggest export in the world? for all intents and purposes, market, 500 single million consumers of it, margaret and's -- are britain's home market. how we are going to remove ourselves is important for business. market, 500 million consumers ofshe had a ms of her cabinet did -- with business people, the week before last. they came away glad that the meeting had taken place but none the wiser on what the government was intending. her meeting today i hope will add further clarity. she says she will have regular meetings with business leaders. she said theree,

will be a rotating cast of business leaders. there will be no continuity of information or dialogue from meeting to meeting. it isn't exactly satisfactory from the british business point of view. emma: looking down the road, what is your pronouncement on how this will end for brexit negotiations? >> i think it will end messily, not quickly. in which britain can agree on a trade deal with the european union within two years. the negotiating period will have to be extended, and some believe that is what the british are trying to do, to get out of the european union within two years and agree on a extension on existing trade privileges indefinitely in the future. julia: former european trade commissioner peter mandelson speaking with emma chandra there. insight,"d, "options

how to trade a visa, which reports earnings after the close . it is on pace to close at record highs ahead of earnings tonight. from new york, this is bloomberg. ♪

julia: this is "bloomberg markets." i am julia chatterley. scarlet: i'm scarlet fu. time for "options inside" with julie hyman. julie: joining me is the chief strategist for interactive brokers. we are watching earnings a lot, even though there is no volatility on the surface, there is a lot of individual stock volatility surrounding earnings. you have come in with a sort of education strategy for how to play earnings. you use a visa as an example in this particular case. what can you do when you are looking ahead to earnings? >> sure. well, the example i gave today

is money options ahead of visa tonight. it is very pure option pricing example, because there is no timeframe and nothing else affecting it, and it is nice that the numbers are working out easily because everything translatable into percentages. the trade i illustrated with uses the 98 straddle -- expiring tomorrow in visa. when i price this out it was trading at about 282. that is basically a quick and dirty way of saying that visa is likely to move 2.8 to 3% on earnings tomorrow. "straddle,"you say straddling that straight price and that it will move that much in either direction. we are looking at the implied one-date right now is, what, around 3%? steve: this is the quick and dirty way that option traders look at it. what are they expecting?

there is not a ton of time premium in this case -- there is none, essentially. bout, $2.82, that is a 2.8%, closer to three with rounding. as you can see on the terminal, visa tends to move 3.3% on earnings. the market is reasonably efficient. julie: and that said, you sort of caution that you need to be nimble when you are looking at something like this. do you still have time to act? steve: you have time to act, but it is not a buy-and-hold strategy. it is not by today and check tomorrow and see if you have one or not. stocks tend to move around a bit after earnings. you could easily have a situation where visa gets the 3% move, but then falls back to 1.5% or something like that, and you have not fully maximize your price, and you find yourself underwater. a long straddle+++

situation, if you are fortunate enough to buy low and sell high, it gives you an incentive, because you want to lock in your profit and then you get a second look at it, because if it is so high, for example, you get to cover your short and possibly turn in trading profits on top. the flipside being if you are sure the straddle. if you are short the straddle, that could be harry. julie: we got to watch it carefully after the close on the company comes out with earnings. thank you so much to achieve options strategist at interactive brokers. julia: house speaker paul ryan is speaking at this moment at the new balance factory in massachusetts.

mark: i'm mark crumpton. it's time for first word news. in a unanimous decision, a nevada board has granted o.j. simpson paroled from prison,

effective in october. he has spent more than eight years behind bars for armed robbery and assault with a weapon after trying to take boards memorabilia from a hotel -- inn less they guess in las vegas in 2008. account hisok into 1995 acquittal on murder charges in the death of his wife, nicole brown simpson, and her friend ronald goldman, as well as a civil court decision that found him liable for those debts. president trump today announced a pharmaceutical package in the white house. the program is aimed at driving u.s. manufacturing and job growth. he was joined by the ceos of merck, corning, and pfizer. the president has declined an invitation to speak at the naacp's annual convention next week in baltimore. the nation's oldest civil rights organization